Y Combinator is a startup incubator that helps fledgling companies get off the ground. Now, it’s looking into ways of using cryptocurrency to give more people the opportunity to invest in the next big thing.

Smart Investment

Y Combinator wants to give people another way to invest in the startups it works with, utilizing the blockchain and cryptocurrency to offer wider access. Sam Altman, the company’s president, expressed a desire to “democratize” the process speaking at the TechCrunch Disrupt conference.

It’s thought that Y Combinator is currently investigating how cryptocurrency might be used to broaden the investment pool. There are various legal factors that need to be taken into consideration before such a system can be put in place.

The idea of using these platforms for investments is broadly similar to the initial coin offerings (ICOs) that are often used to launch a new cryptocurrency. However, Altman had some pointed remarks about the nature of ICOs in their current form.

“Do I think ICOs are silly, bordering on scams? Yes, they are,” he argued. “But, there are a few that are important, and the blockchain is more important than not…ICOs need to be regulated.”

Crypto Crowdfunding

ICOs have come under scrutiny in recent weeks. China just enforced a ban on the practice, which caused tremors across the cryptocurrency market, but authorities have since explained that this is a temporary measure intended to allow for proper regulations to be put in place.

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It’s not difficult to see why there’s some trepidation about the legality of ICOs. It’s a largely unregulated form of crowdfunding that’s capable of bringing in huge amounts of money — in July, Tezos ran an ICO that accrued over $230 million in cryptocurrency.

However, the nature of ICOs demonstrate how cryptocurrency might be used by companies like Y Combinator to create room at the table for people who aren’t necessarily high-net-worth investors.

“More of the wealth creation here is not available to most people,” said Altman, speaking about Silicon Valley. “And I think that’s very bad in a society with already so much wealth inequality.”

 

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

Authored by Brad Jones via Futurism,

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